Looking to get the most tax savings for your business this year?
As a business owner, you want to save money, BUT you may not be aware of these travel and business deductions.
Expenses for business deductions include:
- Training and licensing
- Car mileage
- Marketing and advertising
- Travel – conventions, training, conferences
- Client meals- for meetings and business purposes. IRS guideline= 50%
- Home Office- deduct 10% per 10% square footage of your home being used as a home office. You can deduct 10% costs from your home like mortgage, interest, property taxes, rent, and utilities.
- Office equipment cost- computer, printer, smart phone, fax machine
- Internet expenses
- Cell phone expenses
1) Entertainment Expenses
Under the Tax Cuts and Jobs Act (TCJA) of 2017 entertainment expenses have been eliminated. Therefore, treating your clients to a sporting event will no longer be eligible as a business expense.
But, the TCJA has also introduced several business-related deductions like:
20% Qualified Business Income Deduction- 20% of Income associated with business activity in the U.S. can be deducted for self-employed, S-Corps, and Partnerships.
This deduction is available for businesses whose taxable income is below $315,000 (joint returns) and $157,500 (other taxpayers).
2) Equipment Expenses
In addition, businesses can also deduct equipment expenses. These expenses have increased under the new tax law from $510,000 to $1,000,000 and they include; office furniture, printers, and computers.
3) Transportation Deductions
Do you use your vehicle for business over 50% of the time? View depreciation schedules for automobiles below:
Year 1 = $10,000
Year 2 = $16,000
Year 3= $9,600
Year 4+ = (in the recovery period) $5,760
*For business automobiles purchased after December 31st, 2017.
Included in transportation are air, rail, and bus fares. As well as expenses of operating and maintaining a car used for your business.